Inflated THC Potency Lawsuits are no longer a fringe theory – they are becoming one of the fastest ways for regulators, competitors, and consumers to attack cannabis businesses in 2025. When THC percentages on labels are inflated, plaintiffs now frame those numbers as fraud, unfair competition, and even RICO. If your COAs and labels look “too good,” you may already be in the risk zone for Inflated THC Potency Lawsuits.
Direct Answer: What are Inflated THC Potency Lawsuits?
Inflated THC Potency Lawsuits are civil – and sometimes RICO-flavored – cases claiming that growers, brands, and labs overstated THC levels or hid failed safety results to win market share. In 2025, regulators and competitors are treating these inflated COAs as evidence of misrepresentation and unfair trade practices. The new reality: license revocation, permanent industry bans, class actions, and treble-damages exposure are all on the table.
Section takeaway: This isn’t just “label drama” – it’s a litigation and licensing problem.
Key Facts About Inflated THC Potency Lawsuits in 2025
- “37% THC” flower has gone from marketing flex to litigation trigger.
- Regulators have shown they will revoke licenses and permanently exclude lab owners for sustained testing violations.
- Honest labs are suing “friendly” labs and brands for unfair competition based on potency inflation.
- Negligent misrepresentation (Restatement § 552) is still the core civil theory behind many Inflated THC Potency Lawsuits.
- Coordinated lab/brand schemes give plaintiffs a path to plead RICO and chase treble damages.
- Hemp products that routinely test over the federal THC limit are now part of the same litigation wave.
Section takeaway: The facts pattern looks the same in state after state – inflated numbers, confused consumers, and enforcement escalation.
What Is the “37% THC” Lie – and Why Is It Failing Now?
For years, the market rewarded the highest number on the jar. Consumers hunted for 30%+ and “37% THC” labels. Brands that could show off those COAs grabbed shelf space. Labs that delivered those results got the work.
Behind the scenes, independent re-testing kept showing the same thing: product rarely matched the label. In many cases, potency was materially lower, while contamination failures were quietly ignored or re-tested until they passed.
In 2025, regulators and plaintiffs have stopped calling this a victimless numbers game and started calling it what it is: systematic misrepresentation. That reframing powers Inflated THC Potency Lawsuits and gives regulators cover to impose harsh penalties.
Section takeaway: The market’s old tolerance for “creative” COAs has evaporated; what used to be shrugged off as puffery now looks like fraud.
How the Viridis Settlement Changed the Risk Calculation
The loudest enforcement signal to date came out of Michigan. After years of administrative complaints and a massive recall, the state’s cannabis regulator reached a global settlement with a high-volume testing lab network.
Key points from the resolution:
- License Revocation and Closure
One facility’s licenses were revoked outright, and another was ordered to shut down by a hard deadline. - Permanent Industry Bans
The majority owners were permanently excluded from participation in the state’s regulated marijuana industry. - Admission of Violations
The settlement included an admission of all regulatory violations alleged in multiple complaints.
The regulator’s public framing was just as important as the sanctions themselves: this was not treated as a paperwork issue, but as a sustained pattern of noncompliance that undermined public confidence in the entire market.
For any lab, cultivator, or brand that has built its growth on aggressive COAs, the Viridis result functions as a warning: regulators are willing to pull the plug, not just write another fine.
Illinois angle: Illinois agencies hold the same tools – discipline for mislabeling, unsafe product, and testing violations. When they look for precedent, they will look at results like this.
Section takeaway: The Viridis outcome proves that lab fraud can end careers and destroy equity, not just create a one-time penalty.
How Competitors Turn Inflated THC Potency Lawsuits into Unfair-Competition Cases
Honest labs and operators are no longer waiting for regulators to clean things up. They are filing their own Inflated THC Potency Lawsuits framed as unfair competition and false advertising.
A leading example comes from Massachusetts, where a compliant lab sued several competitors, alleging that:
- The defendants inflated THC potency numbers.
- They passed contaminated batches that should have failed.
- This conduct allowed them to lure away customers and distort pricing.
The court allowed the case to proceed under state unfair-competition law, holding that cheating on mandatory state tests – if proven – can qualify as an “unfair method of competition,” even when the parties are not in a direct contract with each other.
That ruling gives honest labs, brands, and retailers a roadmap for suing competitors who are winning business with inflated COAs.
Section takeaway: Inflated THC Potency Lawsuits are now a weapon competitors can use to claw back market share – not just regulatory clean-up actions.
How THC Lab Fraud Actually Happens
Most 2025 complaints about Inflated THC Potency Lawsuits describe a familiar playbook:
- Lab Shopping for the Highest Numbers
The same batch is sent to multiple labs. The client keeps the COA with the highest potency (and the cleanest safety profile) and quietly drops the strict labs. Internally, that becomes “standard operating procedure.” - “Beauty Contest” Sampling
Instead of a statistically valid composite sample, the grower sends only the frostiest tops or selects buds by hand. The COA describes that tiny, curated portion of the batch, not what the average consumer actually buys. - Dry-Weight and Total THC Games
Labs or clients play with assumptions about moisture and misuse the Total THC formula (THC + 0.877 × THCa). On paper, that can move a product across important thresholds:- From 28% to “30%+ THC” for marketing purposes.
- From over 0.3% delta-9 to “compliant hemp” status for Farm Bill purposes.
Each one of these tactics becomes a factual allegation in Inflated THC Potency Lawsuits. Plaintiffs do not need to prove perfect science; they need to show a pattern of decisions that predictably inflates numbers and hides risk.
Section takeaway: The very tactics that used to help products “test better” now function as exhibits in misrepresentation and unfair-competition claims.
Why Negligent Misrepresentation Still Anchors Most Claims
Most Inflated THC Potency Lawsuits rely on negligent misrepresentation using the Restatement (Second) of Torts § 552 framework:
- The lab is in the business of supplying information (COAs) for others to use in transactions.
- The information is false or misleading in a material way.
- Downstream actors reasonably rely on that information and suffer financial harm.
In the cannabis context:
- Labs issue COAs and potency labels.
- Brands, distributors, and retailers rely on those COAs to price, market, and position products.
- Consumers and investors rely on labels and disclosures when deciding what to buy.
When the numbers are inflated, everyone downstream can claim economic loss: overpaying for product, losing market share to “stronger” competitors, or investing in a brand whose value was artificially propped up by bogus THC claims.
Section takeaway: You do not need criminal intent for liability – careless or structurally biased testing is enough to fuel negligent-misrepresentation claims.
Inflated THC Potency Lawsuits and RICO: When Does It Become “Organized Fraud”?
RICO (the Racketeer Influenced and Corrupt Organizations Act) is where things get existential. Once plaintiffs can plausibly allege a “pattern of racketeering activity,” an Inflated THC Potency Lawsuit stops looking like a business dispute and starts looking like organized fraud.
The RICO theory usually looks like this:
- Labs and cultivators agree – tacitly or explicitly – to inflate THC numbers and ignore failures.
- They use email, texts, and interstate commerce to transmit those false COAs.
- Over time, that conduct becomes a pattern, not an accident.
- The network of businesses is an “enterprise” engaged in mail or wire fraud.
For defendants, RICO allegations bring:
- Treble damages (three times the alleged loss).
- Attorneys’ fees and costs for successful plaintiffs.
- Serious reputational damage with lenders, landlords, and potential buyers.
If your internal communications show pressure on labs to “hit 30%,” celebrations of improbable 35–40% THC COAs, or retaliation against labs that report lower numbers, a creative plaintiff can frame that as evidence of a RICO enterprise.
Section takeaway: Once RICO is in the caption, you are not just arguing about labels – you are fighting allegations of a long-running fraud scheme.
Why Hemp and “Farm Bill” Products Are the Next Target
Hemp operators are not immune; in some ways, they are more exposed.
Investigations into smokable hemp and delta-8/THCa products have repeatedly found that a high percentage of “hemp” samples exceed the 0.3% delta-9 THC limit required under federal law. Products are marketed as compliant but test as marijuana.
In 2025, we are seeing claims that:
- “Hemp” brands are effectively operating as unlicensed marijuana businesses.
- Retailers used aggressive or conflicted labs to generate “compliant” COAs that do not match reality.
- Consumers were misled into buying products that are illegal under federal or state law.
Courts are increasingly skeptical of “It’s hemp, trust the label” arguments when independent testing shows a pattern of noncompliance.
Section takeaway: Hemp SKUs are now firmly in scope for Inflated THC Potency Lawsuits and consumer class actions.
2026 Defense Checklist: How to Reduce Your Risk Now
If you are a cultivator, manufacturer, retailer, or lab, use this checklist to lower your exposure to Inflated THC Potency Lawsuits:
- Audit COAs for the Last 12–24 Months
- Chart THC levels by product line and lab.
- Flag unexplained potency jumps, especially when tied to lab changes.
- Document every time you questioned or rejected a suspicious COA.
- Lock in Sampling Protocols by Contract
- Require composite, statistically valid sampling.
- Prohibit hand-picked or client-selected buds.
- Make the lab responsible for documented sampling SOPs.
- Underwrite Your Lab as if You Might Share a Lawyer
- Ask about prior recalls, enforcement actions, and litigation.
- Avoid labs with reputations for “helpful” COAs or repeated controversies.
- Segregate Hemp Testing and Oversight
- Treat hemp SKUs as a separate risk profile.
- Use independent labs with no economic stake in your hemp business.
- Require more frequent spot-checks and second-opinion testing on edge cases.
- Train Your Team on COA Risk
- Sales and marketing should understand that chasing the highest number is now a litigation risk.
- Make it clear in writing that accuracy and compliance outrank potency when evaluating labs.
- Call Counsel Early When You See Smoke
- Subpoena, CID, or regulator inquiry about potency testing = legal hold and immediate consultation.
- Counsel can narrow discovery, protect privilege, and position you as a cooperating party instead of a primary target.
Section takeaway: A modest investment in audits, contracts, training, and documentation now is far cheaper than defending a multi-defendant RICO or unfair-competition case later.
Conclusion: Don’t Let a Lab’s Numbers Take Your License
The days of casually bragging about “37% THC” without hard data are over. Regulators, competitors, and consumers now view inflated THC numbers as evidence of misrepresentation, unfair competition, and sometimes organized fraud. Inflated THC Potency Lawsuits are the litigation vehicle for turning that evidence into revoked licenses, permanent industry bans, and large damage awards.
If your business model depends on aggressive COAs, friendly labs, or loosely supervised hemp products, you are effectively underwriting your own plaintiff.
Call to Action:
Worried your COAs, sampling practices, or lab relationships could make you a target in an Inflated THC Potency Lawsuit? Call our office or book a free consultation with a cannabis business litigation attorney today.
FAQs About Inflated THC Potency Lawsuits
1. What is an Inflated THC Potency Lawsuit?
An Inflated THC Potency Lawsuit claims that THC percentages or safety results on COAs and labels were intentionally or negligently misstated. Plaintiffs seek to recover economic losses for overpaying, losing market share, or investing based on inflated claims, often under negligent misrepresentation, fraud, consumer-protection, unfair-competition, and sometimes RICO theories.
2. Who can be sued for inflated THC labels?
Labs, cultivators, manufacturers, brands, distributors, and retailers can all be named. Labs are targeted for issuing misleading COAs; brands and retailers are targeted for using those COAs to price and market products. Investors and executives may be drawn in when there is evidence they knew about and benefited from the inflated results.
3. Are hemp products at risk too?
Yes. Hemp products that test over legal THC limits, or that rely on aggressive interpretations of THCa and “total THC,” are increasingly being challenged. Plaintiffs argue that mislabeled hemp is effectively unlicensed marijuana, exposing both brands and retailers to misrepresentation, unfair-competition, and licensing-related claims.
4. How do I know if my lab is a liability?
Warning signs include: consistently higher THC numbers than competitors, sudden potency spikes after switching labs, a reputation for being “friendly,” reluctance to explain methods, or a history of recalls and enforcement actions. If you would be uncomfortable seeing your internal comments about a lab read aloud in court, that lab is a risk.
5. What should I do if I receive a subpoena about potency testing?
Contact counsel before you respond. Put a legal hold in place and do not alter or destroy any documents or data. Your lawyer can negotiate the scope of production, handle communications with regulators or opposing counsel, and help position you as a cooperative third party instead of a primary target.
6. Does this apply to Illinois cannabis businesses as well?
Yes. Illinois operators face similar exposure under state consumer-protection statutes, common-law misrepresentation and fraud doctrines, and – in appropriate fact patterns – federal RICO. Testing and labeling violations can also give Illinois regulators independent grounds to discipline or revoke a license.
Disclaimer: This article is for educational purposes only and is not legal advice. Reading it does not create an attorney–client relationship. You should consult a licensed attorney about your specific situation.
